If corporate America had a theater of the absurd, the Tom Hayes saga would be the encore that won’t stop playing.
The onetime UBS trader who spent years as the face of the Libor scandal — convicted, imprisoned, and later freed when key convictions were overturned — is now suing his former employer for $400 million, alleging he was cast as the “evil mastermind” so senior executives could skate.
The lawsuit, filed Oct. 23 in Connecticut (with a duplicate filed in New York), reads less like a settlement memo and more like a corporate 'mea culpa' in the form of a complaint.
Hayes’s story is a messy, human, and legally combustible mix of emails, fines, law-firm investigations, and prosecutorial bargains.
He was convicted in August 2015 of conspiracy to defraud for his role in Libor submissions and received a 14-year sentence — the stiffest white-collar sentence in British history at the time.
Hayes spent five and a half years in high-security prisons before his conviction was overturned in July.
Now he’s asking the courts to hold UBS accountable, alleging the bank purposely made him the sacrificial lamb to protect more senior figures and avoid broader institutional prosecution.
“It’s important for people to recognize that this is not about me getting rich,” Hayes told Fortune.
“It’s about stopping corporations screwing over their employees, and the only language that they speak is money.”
The complaint argues UBS effectively used him as a bargaining chip with regulators after the bank paid roughly $1.5 billion in settlements to U.S., U.K., and Swiss authorities.
Hayes says the internal investigation — conducted by outside counsel Gibson Dunn and shared with prosecutors — was tailored to point the finger downward.
“They call it a cleansing service,” he told Fortune, alleging that law firms and banks worked out which employees to hand over to prosecutors while senior executives avoided criminal exposure.
There’s a pattern.
Regulators fined banks billions, while many institutions escaped criminal indictment.
UBS, for instance, paid large penalties in 2012; Deutsche Bank later paid $2.5 billion in 2015; across the industry the tab ran into the billions.
Prosecutors often accepted corporate cooperation and hefty fines rather than charging the parent institutions — and that bargain left individuals in the cross-hairs.
As Duke Law professor Brandon Garrett and others have argued, senior executives leave fewer documentary footprints; middle-level traders leave emails and chat logs, which makes them easier targets for prosecution.
Hayes’ complaint depicts a workplace where Libor manipulation was widespread, normalized, and sometimes encouraged.
Regulators later uncovered thousands of messages showing traders coordinating submissions; Hayes himself admitted to more than 2,000 documented requests for Libor adjustments.
“Either I’m the stupidest fraudster ever or I didn’t think I was doing anything wrong,” Hayes said.
He also told Fortune that his autism — diagnosed around his trial — made him more loyal and eager for managerial approval, and that on the trading floor colleagues nicknamed him “Rain Man.”
Those details underscore the human costs at the center of what Hayes calls a systemic injustice: frozen assets, debanking, ruined health, a broken marriage, and the stigma that kept him out of work.
Hayes isn’t alone.
Recent lawsuits by former Deutsche Bank traders and others suggest a broader revolt: ex-bankers are suing employers for allegedly scapegoating them to protect institutional interests.
Banks defend themselves vigorously; Deutsche Bank called similar claims “entirely without merit” and vows to defend against them.
UBS is likely to move to dismiss or shift venue — the litigation promises years of procedural skirmishes before any substantive reckoning.
The stakes are bigger than one man’s claim.
If Hayes (and others) prevail, corporate internal investigations and cooperation strategies with prosecutors could face a seismic shift.
Law firms that conduct internal probes might be scrutinized for whether their findings were independent or effectively part of a negotiated prosecution playbook.
Prosecutors, who say they lack the time and evidence to build cases against senior leaders, may face pressure to demand more accountability higher up the chain rather than accepting “personnel sacrifices” in return for corporate fines.
Hayes understands what he’s asking for — not just money but deterrence.
“Does $10 million matter? No.
Does $100 million matter? No.
Does $400 million matter to shareholders? Maybe a little bit,” he told Fortune.
His lawyer Jonathan Harris frames the suit as a fight for satisfaction and transparency: “My primary goal is to get some measure of satisfaction for Tom Hayes,” Harris said. “But my secondary goal is … I hate it when companies do this.”
Whether the courts see Hayes’ case as corrective justice or as an uphill battle against corporate legal firepower remains to be seen.
For now, the suit has already done something useful: it forced a conversation about accountability, incentives, and who wears the consequences when institutional misconduct comes to light.
We the public end up paying one way or another...but next time, we might just get some changes and even some justice! But I'm not holding my breath...
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Sources: civil complaint filed Oct. 23 (Connecticut and duplicate in New York); reporting and interviews in Fortune (Hayes quotes and case details); historical regulatory fines and Libor investigation findings as referenced in public documents and reporting.
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